I really hate it when writers are willing to bother to include detracting opinions from their thesis without actually addressing them. I appreciate the intent to appear balanced, but if you just...
“I got a Ph.D in finance, not accounting, but I would say I’m not sure if I agree,” said Linda Zhang, CEO and founder of Purview Investments and senior adviser to Social Finance Inc. “Market cap is an indication of willingness to pay for future earnings. Part of that difference could reflect how much both tangible and intangible assets can generate in earnings in the future. I don’t think the difference is just intangible.”
I really hate it when writers are willing to bother to include detracting opinions from their thesis without actually addressing them. I appreciate the intent to appear balanced, but if you just leave a quote like this hanging there and don’t bother to address it, how can I come away from your piece more informed and less confused than when I started? If you have a thesis, defend it. If you can’t defend it, then you need to reconsider your thesis. If you’re going to pull in quotes to poke holes in your thesis, you need to address them. If you’re going to write a piece about intangible assets, then go right out and admit there is no consensus on the definition of this term, how can a reader glean anything at all from the piece?
While even experts differ on what constitutes an intangible asset, and some view Lev’s definitions as loose, expansion in the value of things like Facebook Inc.’s advertising platform, Netflix Inc.’s customer algorithms and Amazon.com Inc.’s user networks is attracting attention now if for no other reason than it explains a mystery of the pandemic era: the stock market’s uncanny resilience.
There was a recent postposted here about the issues with conflating the S&P or other indices with the market itself. Saying that the market is resilient because you are only looking at those companies that are doing well is cyclical.
“But if you think about tangible assets, physical assets, they are not scalable,” Lev said. “You can use a seat in an airplane only once or twice a day. You cannot sell the same seat 5,000 times a day.”
That’s true, but if you have 5,000x the demand for that seat, you can raise the price on that seat. "Intangible" things like licenses for software seats, unlike tangible assets, have no scarcity to drive up prices when demand increases. Isn’t this very basic econ 101 theory about elastic vs. inelastic supply/demand? I’ve never studied economics formally, and even I can see the giant hole in this argument.
A product whose value is derived entirely from a formula, like a drug or software, can be sold millions of times with minimal additional investment.
That’s true, but drugs increasingly require enormous R&D efforts to bring to market, and are increasingly risky as the pharmaceutical space becomes more crowded. Software, on the other hand, may sell many licenses in a short period, but if you want continued sales, it requires a significant investment in maintenance and operational costs to continue to develop, test, and deploy on an ongoing basis, not to mention evolve based on competitive pressure.
I really hate it when writers are willing to bother to include detracting opinions from their thesis without actually addressing them. I appreciate the intent to appear balanced, but if you just leave a quote like this hanging there and don’t bother to address it, how can I come away from your piece more informed and less confused than when I started? If you have a thesis, defend it. If you can’t defend it, then you need to reconsider your thesis. If you’re going to pull in quotes to poke holes in your thesis, you need to address them. If you’re going to write a piece about intangible assets, then go right out and admit there is no consensus on the definition of this term, how can a reader glean anything at all from the piece?
There was a recent post posted here about the issues with conflating the S&P or other indices with the market itself. Saying that the market is resilient because you are only looking at those companies that are doing well is cyclical.
That’s true, but if you have 5,000x the demand for that seat, you can raise the price on that seat. "Intangible" things like licenses for software seats, unlike tangible assets, have no scarcity to drive up prices when demand increases. Isn’t this very basic econ 101 theory about elastic vs. inelastic supply/demand? I’ve never studied economics formally, and even I can see the giant hole in this argument.
That’s true, but drugs increasingly require enormous R&D efforts to bring to market, and are increasingly risky as the pharmaceutical space becomes more crowded. Software, on the other hand, may sell many licenses in a short period, but if you want continued sales, it requires a significant investment in maintenance and operational costs to continue to develop, test, and deploy on an ongoing basis, not to mention evolve based on competitive pressure.